Refinery was big contributor to local economy

Chronicle file photoConstruction on a catalytic processing plant at the Old Dutch Refining Company took place in the late 1940s.

In its heyday, the Old Dutch Refining Co. refined thousands of barrels of crude oil a day at its 100-acre complex northeast of Laketon Avenue and Walker Road.

Founded in 1929 during Muskegon County's short-lived oil boom, the refinery was a major contributor to the local economy. It was founded as a small, independent plant, refining crude oil at first from West Michigan fields and later from all over the country.

Ownership changed twice over the years. In 1953, Aurora Gasoline Co. bought out Old Dutch and modernized the Muskegon Township plant. In April 1959, Marathon Oil Co. acquired Aurora and continued updating the Laketon refinery.

By 1966, the plant was Michigan's fourth-largest refinery out of 12 in the state. It employed more than 100 people and had an annual payroll of nearly $1 million -- more than $6 million in today's dollars. The company in 1965 had pumped $90,000 in corporate taxes into government coffers, making it a major supporter of Orchard View Public Schools and Muskegon Township.

The plant was refining 15,500 barrels of crude oil per day into end products such as gasoline, kerosene, home heating oil, propane and butane. Other products included diesel fuel, industrial fuel oil and asphalt.

Before distribution via trucks, tankers and Marathon's marine terminal on Muskegon Lake -- connected to the Laketon refinery by two seven-mile pipelines -- products were placed in storage tanks next to the plant's processing units. The tanks had the capacity to store nearly 50 million gallons of crude oil and refined products.

At the end of 1966, Marathon shut the refinery down. As the use of long-range pipelines and big tankers spread, smaller regional refineries no longer made business sense. The jobs, the payroll, the economic impact -- it was all gone.

But one effect lingered from the boom days of Old Dutch: oil products that had seeped into the soil during the years of petroleum refining.

By the 1980s, it had become a high-profile public issue. Environmental officials said the contamination had seeped into groundwater and possibly into nearby Barnes Drain.

Neighbors complained of the strong stench of oil and worried about the safety of their drinking water, which came from wells, although state environmental officials said the wells were safe. Class-action lawsuits, angry yard signs and picketing outside the site resulted. Dozens of households used bottled water for years.

By the mid-1990s, much of the controversy faded after Muskegon Township extended municipal waterlines to the area, and Marathon paid for residents' hookups in the immediate contamination zone.

But some residents continued to use irrigation wells for sprinkling and other outdoor use, and some residents downstream of the plume declined to hook up to township water.